Still too many who don’t know this, it’s best to explain to everyone. I’ve explained it to my mother several times, and she gets it, but then conveniently forgets about that when discussing politics.
I was straight up told getting kicked into a new tax bracket would cost me money when I started working back in the 90s. By someone 3x my age. I believed it, being a wide eyed moron. I didn’t figure out progressive tax rates for like a decade after.
I’ve tried to explain this to coworkers who claim to want overtime, but are afraid to due to this. They either don’t understand, don’t believe me, or don’t really want to work OT.
As long as they filled out their w-4s right they wouldn’t even have to worry. I’ve talked to too many people who put zero down and wonder why they owe every year.
I think you’ve got that backwards. My understanding is a 0 on your W2 means you’re taking no deductions and you’ll be taxed at max. Unless you’re thinking of marking as exempt, which would be no tax taken out (then you’d owe at the end of the year).
But I could be wrong there. Reading this PDF from Vanderbilt makes me think I’m not, but taxes are intentionally as confusing as possible so I’m not going to say I’m confident. I inevitably end up owing the fed and paying it with my state return, so don’t take my word for fact lol.
No w2 is the tax document, w4 is what you fill out with your employer. If you owe at the end of the year and that is your only job I would highly suggest going to your employer and updating your w4. You should be able to update your state as well. There is a tool on irs.gov called the Tax withholding estimator which can tell you exactly how much you should be taking out.
Lol, I did that and that’s how I got where I am. Any other time I either get way too much back or I owe a shit ton. At least this way I still come out ahead.
But isn’t that the whole point?? If I put zeros on my w4, why the fuck do I have to use another tool to calculate what I’ll be taxed, then add an additional withholding to make sure I don’t end up with a tax bill in April?
Because putting 0 on your w4 when you know you have to pay taxes is a mistake. The tool is there to help you calculate. It’s not difficult, you just take your last pay stub and plug in numbers then it does the rest. Could it be easier sure. But this is how you work with the tools we have.
It doesn’t help that welfare does actually work this way.
I don’t know the actual figures but my understanding is government assistance tends to work along the lines of “if you make less than $300, then the government gives you $100” so getting paid $350 is actually worse than being paid $290 for example, since going over the threshold cuts off the welfare completely.
This person was clearly joking. Look at their username.
Still too many who don’t know this, it’s best to explain to everyone. I’ve explained it to my mother several times, and she gets it, but then conveniently forgets about that when discussing politics.
I was straight up told getting kicked into a new tax bracket would cost me money when I started working back in the 90s. By someone 3x my age. I believed it, being a wide eyed moron. I didn’t figure out progressive tax rates for like a decade after.
Just shitty one person could cost so many people so much opportunity in life.
I’ve heard of people who use this as an excuse to turn down overtime
I’ve tried to explain this to coworkers who claim to want overtime, but are afraid to due to this. They either don’t understand, don’t believe me, or don’t really want to work OT.
As long as they filled out their w-4s right they wouldn’t even have to worry. I’ve talked to too many people who put zero down and wonder why they owe every year.
I think you’ve got that backwards. My understanding is a 0 on your W2 means you’re taking no deductions and you’ll be taxed at max. Unless you’re thinking of marking as exempt, which would be no tax taken out (then you’d owe at the end of the year).
But I could be wrong there. Reading this PDF from Vanderbilt makes me think I’m not, but taxes are intentionally as confusing as possible so I’m not going to say I’m confident. I inevitably end up owing the fed and paying it with my state return, so don’t take my word for fact lol.
No w2 is the tax document, w4 is what you fill out with your employer. If you owe at the end of the year and that is your only job I would highly suggest going to your employer and updating your w4. You should be able to update your state as well. There is a tool on irs.gov called the Tax withholding estimator which can tell you exactly how much you should be taking out.
Lol, I did that and that’s how I got where I am. Any other time I either get way too much back or I owe a shit ton. At least this way I still come out ahead.
Thanks for the clarification re W2/w4.
But isn’t that the whole point?? If I put zeros on my w4, why the fuck do I have to use another tool to calculate what I’ll be taxed, then add an additional withholding to make sure I don’t end up with a tax bill in April?
It’s insane.
Because putting 0 on your w4 when you know you have to pay taxes is a mistake. The tool is there to help you calculate. It’s not difficult, you just take your last pay stub and plug in numbers then it does the rest. Could it be easier sure. But this is how you work with the tools we have.
I am surprised by the amount of professionally employed homeowning parental adults I have encountered that do not know this.
It’s what happens when public education is poorly funded and doesn’t explain the basics with what little they do have.
It doesn’t help that welfare does actually work this way.
I don’t know the actual figures but my understanding is government assistance tends to work along the lines of “if you make less than $300, then the government gives you $100” so getting paid $350 is actually worse than being paid $290 for example, since going over the threshold cuts off the welfare completely.
Hell there was even a West Wing episode where they got it wrong.
That actually doesn’t surprise me because the West Wing was written by rubes.
Youd be surprised at how many think a raise gives them less
That doesn’t mean anything.